The Value of Summer Memories at The Family Cottage
It doesn’t matter what time of day you arrive, everything always looks the same. Granted, the trees are taller and wildflowers seem to be growing everywhere. But your family cottage is the same to you today as it’s always been.
Cubby holes filled with trinkets and treasures
While waving hello to neighboring friends you realize every family cottage and summer home is as different as the memories gathered by families every summer. Each cottage has a special cubby hole filled with trinkets and treasures from sandy beaches and hiking adventures through surrounding woods. Weathered hinges guarantee screen doors will squeak open and slam shut right on cue announcing that this is summer. It’s easy to get caught up in the moment of racing down to the lake and assuming every summer will be just like the last.
My son Casey has been crossing out days on the calendar as the school year winds down into his summer up north. He’s been talking non-stop about everything he wants to do this summer, and spending time with those who are a part of his summer. Without fail, his list includes everything he wants to do each summer. I’ve also been thinking about these excursions and of how to keep our lunch dry during our annual trip down the Crystal River (see photo).
As much as family cottages and memories stay constant, change and different circumstances ultimately visit families over time. Your family cottage is often one of your most valuable legacy assets and attention should be directed to new options and enacted tax laws available to you to protect your family cottage now, and for future generations.
Family goals remain the same
It’s no surprise that in spite of our busy lives some things never change. Family goals remain the same of protecting those you love, the place you love, and protecting the experiences and cottage memories you love.
When your family begins to gather this summer consider talking with them about the future of the family cottage. Now might be the time to begin the discussions about developing a cottage succession plan, 
if you haven’t already, and looking at short- and long-term strategies and legal structures to avoid the uncapping of your property.
At the minimum, a solid cottage succession plan protects your family cottage from passing outside the family, solves future conflicts between family members about how the family cottage is operated, maintained and improved, and probably most important of all, avoids, through the right to partition governed by real estate laws, the forced sale of your family cottage.
Even a simple plan, which you can easily change and update, is better than the consequence of not having a protective cottage succession plan in place.
Protecting a special place
You know deep in your heart this is where your family memories live, and like a protective mother bear you’ll do whatever you need to do to protect this time, this special place for future generations.
If you have questions or need additional information about planning for your cottage, please call and also visit our Cottage Law website about how to protect the family cottage at www.Cottage-Law.com.
Now if I could just figure out a way to protect my brown-bag lunch during my upcoming water adventures with Casey….
Dan A. Penning
As families begin contemplating vacations up north or weekend getaways to one of Michigan’s many inland lakes, water access points deserve careful consideration as they have become sources of lawsuits regarding the public’s right to access the surface of the water from public roads adjacent to the water. Many of these lakes are bordered by subdivisions that were platted decades ago and depending on the language in the plat and the type of public roads, whether perpendicular or lateral to the lake, will determine whether the surface of the water can be accessed by the public by means of the platted streets.
What has become problematic for nearby property owners, however, is when public water access expands to include parties, picnics, trespassing on neighboring property, etc., which has resulted in some of these access points becoming more like a public park.
The road severs the portion of the lot adjacent to the water from the lot across the road, commonly with a dwelling on it. In 2009, the Michigan Supreme Court determined that the dedication of the public road does not serve to sever the property owner from their riparian rights and thus, the public is not granted access to the water over the portion of the lots on the waterfront.
Late last week I received an email from a friend of mine who works in the Detroit area. He had just returned from a week-long trip to Providence, Rhode Island. In spite of being a bit bleary-eyed from his drive in from the east coast, he wanted to share information about how many law firms sponsor local community events.
I have always had an appreciation and understanding for those whose careers require them to travel extensively and be away from their families and some semblance of a regular routine. Even with all our new fancy electronic devices to stay in touch, it’s not the same. I still struggle with juggling multiple offices and trying to make sure I am available to attend my kids “big games”.
With the Memorial Day holiday weekend approaching it signals the beginning of summer vacations and weekend getaway trips. Many will travel out of the country, or to other states, while others will travel closer to home to resorts or the family cottage. Regardless, enjoy yourself and the local events, festivals, and activities that were planned and sponsored with you in mind!
P.S.
The Supreme Court’s decision in the Klooster case provides that certain types of joint ownership of real estate in Michigan can prevent property taxes increasing at the time of a joint owner’s death. While the decision is generally favorable to the taxpayer, there are various rules and contingencies that must be satisfied in order to achieve property tax savings.
However, after certain transfers of ownership occur, property becomes uncapped and thus subject to reassessment based on actual property value. In the event of a “transfer of ownership” of property after new law took effect in 1995, the property’s taxable value for each calendar year following the year of the transfer is the property’s state equalized valuation for the calendar year following the transfer.
In order to avoid an uncapping of property taxes at the death of a joint owner, the first element that must be satisfied is that when the joint ownership was established, at least one of the joint owners was an “original owner”. An “original owner” to satisfy this provision of the joint tenancy exception would be a person who owned the property at the time that the last “uncapping occurrence” occurred. For example, if a husband and wife, or the survivor of them, purchased property in 1998 resulting in the uncapping of the property at the time of their purchase, then either of them would be an “original owner” and satisfy this element of the joint tenancy exception.
The next element that must be satisfied in order for the joint tenancy exception to apply is the form of joint ownership must be “joint ownership with rights of survivorship.” This type of joint ownership means that all of the joint owners have a current ownership interest in the property; however, at the time of one of their deaths, the deceased individual’s interest then, by operation of law, transfers to the remaining joint owner(s). A type of joint ownership that does not satisfy the test is joint owners as “tenants in common”. This type of joint ownership indicates that a joint owner and undivided fractional share of the property and in the event of a joint owner as a tenant in common’s death, the deceased individual’s share is then part of his or her estate and can transfer to their heirs.
While the Supreme Court’s decision presents a benefit to Michigan taxpayers who are real estate owners, everyone should keep in mind that the Legislature could amend the current law to remove the joint ownership exception which has been recognized by the Supreme Court in the Klooster case. Whether or not legislative action in the future would be retroactively applied to those joint ownership situations that existed prior to any legislative action taking place is unclear. If you are considering a transfer of real estate to possibly take advantage of the joint tenancy exemption, please contact us to discuss the specific facts of your situation and your goals to make sure your proposed action is best for you and your family.
We are pleased to announce that for the second consecutive year, Dan A. Penning was named a FIVE STAR wealth advisor for 2011 by HOUR Detroit Magazine. The magazine contracted an independent market research company to administer a research process to identify a select group of wealth managers who were exceptional in both their ability and commitment to overall client satisfaction.
More than 102,500 high net worth individuals and 4,200 financial services professionals were asked to evaluate wealth managers including financial planners, investment advisors, estate attorneys and accountants in the Detroit community. The final list was reviewed by a blue ribbon panel of financial services industry professionals. Less than 7% of the wealth managers in the Detroit area, including attorneys, accountants, and financial advisors, were selected.
Dan A. Penning has been invited as a featured speaker to present on the topic of estate and gift tax issues concerning cottage succession planning at the ICLE 51st Annual Probate & Estate Planning Conference for Michigan attorneys. Penning will join two other speakers addressing cottage law succession planning issues during the three-day conference featuring a variety of topics for Michigan attorneys seeking continuing legal education. The conference will be held at the Grand Traverse Resort, in Acme, Michigan on May 19-21, 2011 and a second presentation will be held at The Inn at St. John’s in Plymouth, Michigan on June 17-18, 2011.
We have three great sons; our oldest son, Tucker, 19, a student at the University of Michigan, and twin 16-year-old boys, Conor and Casey who are finishing their sophomore year in high school.
It would take much too long to recount all the special things we have experienced the last 15 years, but aside from the many weekends in hotels, driving home on Sunday nights after weekends away through snow and ice storms, there were many special moments. As a family, we witnessed incredible accomplishments by a young boy and, in recent years, a young man as a player, teammate, and leader.
in a Chicago tournament where the team won a championship. As far as sports go, we now have the opportunity to continue our support and cheer our son Conor on in his efforts as a very good high school lacrosse player.
The formation of the Department of Licensing and Regulatory Affairs (LARA) is the latest effort of Governor Snyder to create a smaller, yet more centralized Michigan state government. It is not simply a name change, but a reorganization of the Department of Energy, Labor, and Economic Growth, and other state departments, which has the potential to make it a little easier for businesses to function and stay in compliance with state laws and regulations.
Data breaches and loss of personal identifying information have spawned products and services to help consumers prevent or minimize the risk of identity theft. Some rights and protections you have under federal or state laws can help you protect your identity and recover from identity theft at no cost, but some people either prefer to pay a third party to perform these services or they are not aware that many of the services are available at no cost.
Equifax: 1-800-525-6285
Federal law gives every consumer the right to one free credit report from each nationwide consumer reporting company every 12 months. Requesting a report from a different company every few months can help you monitor activity on your credit reports. For more information, or to request your free credit reports, visit 
The Leelanau Sands Showroom and Grand Traverse Resort are sponsoring the breakfast and the event will be opened with a welcome greeting from Chairman Derek Bailey.
